Hey, Who Moved My Storefront?

We used to go shopping; now we are shopping. Smartphone in hand, we start our shopping experience by accessing nearly perfect information – product specs, ratings and reviews, competitive pricing – within moments of considering a need, want or purchase. For all practical purposes, the front door of retail has moved online.

REI recently disclosed that 75% of REI’s in-store shoppers have visited the retailer’s website in the seven days prior to a store visit. And it’s not just REI. Forrester estimates that 48% of all purchase decisions made in the US – that’s $1.5 trillion – are now influenced by digital experiences.

Yet few retailers have noticed. Such giants as Walmart and Nordstrom are investing billions in e-commerce, but that’s less than 8% of retail sales. Most retailers are missing the 40% of sales that are influenced online but finalized in-store. By 2020, 25% of retail sales will be online, but 100% of all sales will be influenced, if not governed, by digital interactions. When that happens, retailers and manufacturers will need to provide full-blown retail experiences on an anyone-anywhere-anytime basis.



The trouble is, most companies are working solely on integrating online and in-store service after the sale. You can buy something online and return it to the store. You can order a product on a retailer’s website and pick up at a conveniently located outlet. Some retailers will even offer to procure an item that’s out-of-stock, ordered online from their in-store system, and ship it to you free of charge.

Retailers and manufacturers need to focus far more on the front door – creating the chain of digital interactions that set sales in motion. This starts with budgeting. The e-commerce division typically gets a budget commensurate with the percentage of sales that actually get made online, instead of the vast and growing importance of digitally influenced sales. So the marketing budget is 8% when it needs to be 48%.

Retailers need to use some of that expanded budget to offer better tools to digital pre-shoppers. Think more precise store-locator features like directions from public transit, and rich store-detail pages including the expertise of staff on duty, current wait times for in-store services, and current inventory in-store. Retailers also need to raise their local SEO games so mobile searchers find them fast. That means consistent listings in web location directories (e.g., Yelp, Foursquare, Facebook) and active management of review sites.

Then retailers need to redesign stores around their new front door. It’s too early for any of us to know exactly what “digitally influenced” stores will look like five or 10 years from now, but we certainly have clues in the new stores from digital natives Warby Parker and Bonobos. Their stores function as experience centers for a shopping flow that starts and ends online. They are designed for serendipity and discovery that builds brand loyalty. Shoppers build look books and log sizes/measurements so they can make accurate purchases online.

Increasingly, stores will exist for product discovery, experimentation and sizing. For clues, look at Rebecca Minkoff’s RFID-enabled dressing room mirrors, or the NastyGals one-way mirrored dressing rooms. These features give shoppers reasons to go storing. They’ll want to feel the fabric, determine the size, appreciate the unique features, and have the perfect version quickly delivered to them (even if it’s not in-stock in that particular store). As they do, electronic shelf labels will give them ratings and reviews updated in real time; their phones will interact with in-store displays; and the staff will have their shopping histories on tablets.

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